Chinese surgical robot manufacturer Tinavi (天智航, 688277.SH) disclosed its financial results for the first quarter of this year on April 24, showing a better-than-expected performance.
According to the company’s Q1 report, it generated revenue of 39.5 million yuan (US$6.2 million), representing a year-on-year growth of 130.28%, and achieved a net profit of 8.6 million yuan.
In addition, the company recorded revenue of 156 million yuan in 2022, up 0.11% YoY. Its R&D spending totaled 123 million yuan during the same period, 11.7% higher than in the previous year, and represented 78.52% of its total revenue, up 8.15 percentage points over a year earlier.
The strong performance is seen by market pundits as a result of China’s recent policies to encourage innovation in high-end medical equipment and accelerate the review and approval of medical devices.
In March, China’s National Health Commission released a list of large-size medical equipment allowed to be sourced by hospitals.
The list reduced the number of items subject to regulatory approval and eased price restrictions, a move that is expected to boost the growth of high-end medical devices, including surgical robots.
Despite the impact of COVID-19 on its sales last year, Tinavi still managed to achieve revenue growth in 2022.
This may augur well for the company and the industry as a whole, especially considering that much of the sector is operating at a loss.
The company’s annual report also indicated that it carried out over 12,000 surgeries with its orthopedic surgical robots in 2022, up more than 20% YoY.
As of March 31, 2023, the number of robot-assisted surgeries exceeded 40,000, with the company deploying its products to about 170 hospitals in China for clinical application.
In 2020, the domestic surgical robot market was valued at a mere US$400 million, or 5.1% of the global market, significantly lower than in the US or other western countries, said Guosheng Securities in a research note.
Although China’s surgical robot market is relatively small compared to the US and EU markets, it is growing rapidly.
According to Frost & Sullivan, the CAGR of China’s surgical robot market from 2020 to 2025 is expected to reach 44.3%, much higher than the global CAGR of 22.6% from 2015 to 2020, indicating that the domestic surgical robot market has great potential for development.